MONEY Financial Planning

5 Simple Questions that Pave the Way to Financial Security

Analyzing 20 years of data, the St. Louis Fed found that five healthy financial habits are the key to future wealth.

Want to know how your bank account stacks up against that of your neighbors? You’ll get an idea by asking yourself five simple questions, new research shows.

The St. Louis Fed examined data from the Federal Reserve’s Survey of Consumer Finances between 1992 and 2013 and found a high correlation between healthy financial habits and net worth. In the surveys, the Fed asked:

  • Did you save any money last year? Saving is good, of course. Just over half in the survey earned more than they spent (not counting investments and purchases of durable goods).
  • Did you miss any credit card or other payments last year? Missing a payment isn’t just a sign of financial stress; it may trigger late fees and additional interest. An encouraging 84% in the survey made timely payments.
  • After your last credit card payment, did you still owe anything? Carrying a balance costs money. In the survey, 44% said they carried a balance or recently had been denied credit.
  • Looking at all your assets, from real estate to jewelry, is more than 10% in bonds, cash or other easily sold, liquid assets? If you don’t have safe assets to sell in an emergency, you are financially vulnerable. Just over a quarter of those in the surveys have what amounts to an emergency fund.
  • Is your total debt service each month less than 40% of household income? This is a widely accepted threshold. A higher percentage likely means you are having trouble saving for retirement, emergencies, and large expenses.

The average score on the 5 questions was 3, meaning that the typical respondent—perhaps your neighbor—had healthy financial habits 60% of the time. That equated to a median net worth of $100,000. Those who scored higher had a higher net worth, and those who scored lower had a lower net worth.

In general, younger people and minorities scored lowest, while older people and whites scored highest. Education was far less relevant than age. “This may be due to learning better financial habits over time, getting beyond the financial challenges of early and middle adulthood and the benefit of time in building a nest egg,” the authors wrote.

It should come as no surprise that healthy financial habits lead to greater net worth over time. But the survey suggests a staggering advantage for those who ace all five questions. One of the lowest scoring groups averaged 2.63 out of 5, which equated to median net worth of $25,199. One of the highest scoring groups averaged 3.79 out of 5, which equated to a median net worth of $824,348. So these five questions not only give you an idea where your neighbors may stand—they pretty much show you a five-step plan to financial security.

MONEY Aging

When Dementia Threatens a Family’s Finances

Grandfather at table of food
Getty Images

One in three adults will suffer from dementia. Here's how to achieve financial security — and a patient's dignity — when that happens.

My client sat across the table telling me about her late husband — first, his diagnosis of dementia, and then, his suicide a few years later.

On the night before he took his own life, she had finally gathered the strength to tell him he needed to turn their finances over to her. Larger than life when he was healthy, he had been a tremendous businessman. But the dementia had robbed him of sound decision-making, and she needed to protect what was left of their shrinking nest egg.

She asked me, “What should I have done?”

In the years since his death, she couldn’t help wondering whether that final financial conversation had been the tipping point in his waning will to live. It wasn’t her fault; she had supported him throughout his illness with an unmatched strength of conviction and marital devotion. It’s pointless to try to judge the effect of a particular conversation, because he had suffered for a decade. The disease had torn through their lives, leaving a series of wreckages: their relationships, his ability to handle even menial tasks, and — perhaps most painful — his self-esteem.

I told my client she had been in a no-win situation. She couldn’t risk her own future welfare by allowing her husband’s disease to squander all they had worked for. She was in her 60s, very healthy, and had a 100-year-old mother whose zest and longevity foretold of my client’s likely need to support herself for another 30-plus years. To protect herself and her husband from risky investments, unwise purchases and even fraud, my client needed to take over the financial reins. But how do you conduct this crucial conversation about control without robbing a dementia patient of his or her already-declining dignity? With the Alzheimer’s Association reporting one in three seniors in the United States contracts Alzheimer’s or dementia, it’s time we start talking about it.

Some advice:

Avoid a crisis. Don’t wait to have one huge conversation. Ideally, you would have a series of talks before anyone is diagnosed with dementia. As part of an overall estate plan, it’s important to discuss all family members’ wishes for the end of their lives and prepare them for the possibility of losing their independence. It may sound trite to say, “One day, Dad, we may take care of you the way you took care of us,” but laying that foundation ahead of time may soften the blow. It’s nice to think that we live on our own until the end, when we quietly pass in our sleep, but that isn’t our current reality. Medical advances have been successful in prolonging our lives, but not at guaranteeing our independence.

Having a big discussion that feels like a dementia patient is the subject of an intervention is stressful for all involved. Save the intervention-type conversations for true emergencies, and recognize the patient needs to feel safe and loved, not confronted.

Understand the backstory. Everyone brings a different money mindset to this conversation. Ask yourself, why is money important to this patient? Is it imperative to provide for the family? Is it a priority to give it away? Open the conversation by affirming the ways the patient has accomplished his financial objectives until this point.

Take into account any major financial experiences that may be coloring this particular conversation. Olivia Mellan, a psychotherapist specializing in money conflict resolution, points out that men and women can have different views of common financial decisions. If a wife wants to open her own bank account, for example, she may simply desire some independence. Her husband, however, may interpret her wishes as a lack of marital commitment. If a dementia patient has had this kind of conflict, structure your discussion to avoid triggering those old memories and feelings.

Pick your battles. Can the patient retain investment control over a $10,000 account? Is there room in the budget for a weekly allowance so he can continue making spending decisions? Both tactics can distract the patient from participating in larger financial decisions.

Steven A. Starnes, an adviser with Savant Capital Management, tells a story about his late grandmother, who passed away from Alzheimer’s. Out shopping with her daughter, she found a relatively expensive necklace she just had to have. The family had created room in the budget for one-time splurges that would bring joy to her remaining years. As long as the purchase didn’t thwart the family’s long-term financial plans, it was okay. So Starnes’ grandmother came home with a new necklace that drew her focus away from the other losses she was experiencing.

Utilize helpful resources. Some financial advisers are a tremendous help in facilitating these conversations. A person’s declining financial abilities are often the first sign of dementia, so advisers are well-positioned to help a family. Just having an outside party to ask the tough questions can ease the pressure. In fact, some advisers, including Starnes, specialize in clients with dementia.

A growing number of professionals specialize in different end-of-life issues. The National Association of Professional Geriatric Care Managers provides information about care management and a directory of professionals who can help clients attain their maximum functional potential

Another source to locate a professional is the Society of Certified Senior Advisors listing of certificants who have demonstrated expertise in a range of core competencies involving the aging process. Among those holding CSA accreditation are financial professionals, caregivers, gerontologists, and clergy.

To help a family prepare for a discussion of changing financial responsibilities, circulate the book Crucial Conversations, by Kerry Patterson. Another great resource is The Other Talk,by Tim Prosch, which specifically addresses end-of-life conversations between aging parents and adult children. Do some research on the best ways to communicate with dementia patients. It’s difficult work, but it is possible to absolve a dementia patient of financial responsibilities while helping him maintain his dignity.

———-

Candice McGarvey, CFP, is the Chief Story Changer of Her Dollars Financial Coaching. By working with women to increase their financial wellness, she brings clients through financial transitions. Via conversations that feel more like a coffee date than a meeting, her process improves a client’s financial strength and peace.

MONEY Tech

What the Girl Scouts Are Doing at the 2015 Consumer Electronics Show

Girl Scouts mark the start of National Girl Scout Cookie Weekend in Vanderbilt Hall in Grand Central Terminal in New York.
Richard Levine—Alamy Get ready for Digital Cookie.

Attendees of the annual CES in Las Vegas expect to be overloaded with new gadgets and hi-tech wizardry. Skechers, AARP, and old-fashioned cookies are more of a surprise.

The Consumer Electronics Show, which kicks off in Las Vegas on January 6, is undeniably a big deal. The latest tech trends and exciting new gadgets aren’t the only things featured at the show; a broad spectrum of celebrities ranging from 50 Cent to Dr. Phil will also make appearances. In 2014, more than 160,000 people attended the conference (including more than 50,000 exhibitors), and 20,000+ new products were introduced to the public. The 2015 version of the World’s Largest Trade Show, as Bloomberg News put it, will feature two miles of floor space, and attendance should again surpass the total number of hotel rooms available in Las Vegas.

This year’s list of exhibitors at the CES is 125 pages long, and includes 32 separate entries alone that start with name Guangzhou, the third-largest city in China. The event draws the attention of such a vast global audience—via the media, not just in terms of actual attendance—that many organizations with seemingly nothing to do with tech and electronics feel compelled to run booths alongside, you know, actual electronics companies. Here are three surprising examples.

The Girl Scouts of the USA
This one makes more sense than you might at first think. It was recently announced that Girl Scout cookies will soon be available for sale online for the first time, and the organization is attending the 2015 Consumer Electronics Show to showcase Digital Cookie, the new program that will enable girls to sell cookies online while learning about business and tech. “Digital Cookie will introduce vital 21st-century lessons about online marketing, app usage, and ecommerce to more than one million excited Girl Scouts who will be in the driver’s seat of their own Digital Cookie businesses,” a Girl Scouts press release explains.

What’s more, venturing into online sales and attending the CES are in line with the Girl Scouts’ overarching push to keep up with the times. The organization has recently demonstrated an interest in trying to keep up with foodie trends. A gluten-free cookie was introduced in early 2014, and three new cookies go on sale in 2015: Toffee-tastic (a toffee butter cookie that’s gluten-free), Trios (peanut butter and chocolate chip, also gluten-free), and Rah Rah Raisin (oatmeal raisin with chunks of Greek yogurt—which has been a hot food trend too).

Skechers
The “innovation” that Skechers is probably best known for is the “toning shoe,” a product that supposedly helped wearers get in shape and lose weight simply by walking around in them. Those claims have since been shown to be unfounded, and in a settlement with the Federal Trade Commission Skechers agreed to issue refunds worth $40 million to customers who bought the Kardashian-endorsed sneakers.

So what’s Skechers doing at the CES in 2015? The answer has nothing to do with more dubious ideas about how wearing a sneaker will tone your legs and butt. Instead, according to Gizmodo, Skechers will be showcasing kids’ sneakers that are a “wearable version of Simon,” the classic musical memory game. Called Game Kicks, the sneakers have colored buttons that light up and make sounds, and are meant to keep kids entertained while testing their memory. Mercifully for parents, there is a mute button so kids can play silently. They’re expected to retail for $65 when they go on sale in early 2015.

AARP
For the second year in a row, the AARP (formerly the American Association of Retired Persons—now just AARP to include everyone 50 and older) has announced it will “unleash 50 tech-savvy seniors” to roam the CES in Las Vegas to test the latest tech and see just how practical and user-friendly (or not) the innovations are for older consumers. The seniors, who will wear AARP T-shirts featuring the hashtag #DisruptAging, will be sharing their thoughts and observations in a CES panel discussion.

The point, AARP senior vice president of thought leadership Jody Holtzman said in a press release, is that tech and electronics companies should be paying more attention to the needs of older Americans: “AARP is committed to showing the tech industry that people over 50+ make up a powerful longevity economy, representing 106 million people responsible for at least $7.1 trillion in annual economic activity, a group that successful businesses won’t want to ignore.”

MONEY Medicare

The Huge Health Care Expense Medicare Won’t Pay

BurwellPhotography.com—iStock

For peace of mind, you need more than Medicare.

Medicare helps more than 55 million Americans with their health care expenses, with most people age 65 or older qualifying for coverage. With benefits for everything from hospital stays to doctors’ visits, Medicare is an essential part of retirement financial planning for older Americans in dealing with one of the largest expenses they bear. Yet there’s a huge gap in Medicare coverage that doesn’t provide financial assistance for services that an estimated 70% of senior citizens will need at some point during their lives. In order to prepare yourself for those expenses, you’ll need to make separate provisions outside Medicare to ensure that you’ll have the financial resources necessary to cover the costs of care.

Nursing homes, long-term care, and the Medicare gap

Medicare covers many things, but the coverage it provides for nursing homes and other types of long-term care are extremely limited. Medicare Part A, which covers most inpatient care such as hospital visits, does make a provision for covering the costs of a skilled nursing facility. If you qualify, Medicare will pay 100% of the cost of skilled nursing facility for 20 days, and it will cover all but a $157.50 per day copayment in 2015 for the next 80 days of approved care at such a facility.

However, in order to qualify for those services, you need to have had a qualifying hospital stay of at least three days, and the care you receive at the facility must be connected to the treatment you were getting in your initial hospital visit. Once your 100 days is up, you’re responsible for all costs — and you’ll need a break of at least 60 days in a row in order to end your current benefit period and renew your benefits for future coverage.

More importantly, many people in nursing homes aren’t receiving skilled nursing services and therefore don’t qualify for Medicare benefits at all. If the only kind of care you need is custodial care such as helping you get in and out of bed, bathing, or getting dressed, then Medicare won’t cover those costs.

When it comes to home health services, Medicare also has limits. You’re entitled to up to 100 home health visits under Medicare Part A following a hospital stay, and Part B also provides certain home health benefits. But to qualify, your doctor has to certify that you’re homebound, and you must need skilled nursing care or certain other treatment such as physical therapy, speech-language pathology, or occupational therapy services. Again, Medicare won’t cover purely personal care, making seniors responsible for much of their own costs for getting in-home help.

How to bridge the gap

Unfortunately, the costs that Medicare doesn’t cover play a part in most retirees’ lives at some point during their retirement. According to a study from the Department of Health and Human Services, almost seven out of every 10 Americans turning age 65 will need long-term care at some point in their lives.

Most traditional insurance, including medical and disability insurance, follow Medicare’s rules in limiting coverage to those whom are medically necessary and involved skilled, short-term care. Even supplemental Medicare policies typically only cover the $157.50 copayment for covered services and provide nothing for long-term care.

In order to get insurance coverage for long-term care needs, you’ll need a specific long-term care insurance policy. These specialized policies cover a wide array of services, ranging from assisted living facilities and nursing homes to home-healthcare and personal care needs. Premiums depend on the age at which you buy insurance, the maximum daily coverage you choose, and the lifetime maximum benefits the policy will provide. In general, the older you are when you obtain long-term care insurance, the higher your annual premiums will be. Moreover, many long-term care policies include what are known as elimination periods, which define initial time periods of three months or longer during which you’ll be solely responsible financially for covering costs of care.

In addition, some states provide programs that assist with certain care needs for senior citizens. Nutrition programs deliver meals directly to many retirees’ homes, and transportation and personal-care assistance are aimed at making lives a little easier. Those services by themselves won’t address many of the major needs people have, but they can nevertheless help bridge some of the coverage gap in Medicare.

Medicare is a vital part of your long-term financial security in retirement, and it covers many different services. But to protect yourself against the needs for nursing and other long-term care, you’ll need to turn to alternatives to Medicare to give yourself the peace of mind that you’ll be able to cover those extensive costs.

MONEY investment strategies

Why Even “Proven” Investment Strategies Usually Fail

Monopoly money
Alamy—Alamy Beware investment strategies that haven't been tried with real money.

Anyone with a computer can find a stock picking strategy that would have worked in the past. The future is another story.

You probably know, because you’ve read the boilerplate disclaimer in mutual fund ads, that past performance of an investment strategy is no indicator of future results.

And yet, funnily enough, nearly everyone in the investment business cites past results, especially the good results. Evidence that an investment strategy actually worked is a powerful thing, even if one knows intellectually that yesterday’s winners are more often than not tomorrow’s losers. At the very least, it suggests that the strategy isn’t merely a swell theory—it’s been tested in the real world.

Except that sometimes you can’t take the “real world” part for granted.

Just before Christmas, an investment adviser called F-Squared Investments settled with the Securities and Exchange Commission, agreeing to pay the government $35 million. According to the SEC, F-Squared had touted to would-be clients an impressive record for its “AlphaSector” strategy of 135% cumulative returns from 2001 to 2008, compared with 28% in an S&P 500 index. Just two problems:

First, contrary to what some of F-Squared’s marketing materials said, the AlphaSector numbers for this period were based solely on a hypothetical “backtest,” and there was no real portfolio investing real dollars in the strategy. In other words, after the fact, F-Squared calculated how the strategy would have performed had someone had the foresight to implement it. Underscoring how abstract this was, the backtest record spliced together three sets of trading rules deployed (hypothetically) at different times. The third trading model, which was assumed to go into effect in 2008, was developed by someone who, the SEC noted in passing, would have been 14 years old at the beginning of the whole backtest period, in 2001. (The AlphaSector product was not launched until late 2008; its record since it went live is not in question.)

Second, even the hypothetical record was inflated, says the SEC. The F-Squared strategy was to trade in and out of exchange traded funds based on “signals” from changes in the prices of the ETFs. But F-Squared’s pre-2008 record incorrectly assumed the ETFs were bought or sold one week before those signals could possibly have flashed. The performance, says the SEC, “was based upon implementing signals to sell before price drops and to buy before price increases that had occurred a week earlier.” Not surprisingly, a more accurate version of even the hypothetical strategy would have earned only 38% cumulatively over about seven years, not 135%.

Call it a woulda, shoulda—but not coulda—track record.

Steve Gandel at Fortune has been following this story for some time and has the breakdown here on how it all happened. This kind of thing is (one hopes) an extreme case. But there’s still a broader lesson to draw from this tale.

Although it’s a no-no to say that a strategy is based on a real portfolio when it isn’t, there’s not a blanket rule against citing hypothetical backtest results. In fact, backtesting is a routine part of the money management business. Stock pickers use it to develop their pet theories. Finance professors publish papers showing how this or that trading strategy could have beaten the market. Index companies use backtests to construct and market new “smart” indexes which can then be tracked by ETFs. But even when everyone follows all the rules and discloses what they are doing, there’s growing evidence that you should be skeptical of backtested strategies.

Here’s why: In any large set of data—like, say, the history of the stock market—patterns will pop out. Some might point to something real. But a lot will just be random noise, destined to disappear as more time passes. According to Duke finance professor Campbell Harvey, the more you look, the more patterns, including spurious ones, you are bound to spot. (Harvey forwarded me this XKCD comic strip that elegantly explains the basic problem.) A lot of people in finance are combing through this data now. But if they haven’t yet had to commit real money to an idea, they can test pattern after pattern after pattern until they find the one that “works.” Plus, since they already know how history worked out—which stocks won, and which lost—they have a big head start in their search.

In truth, the problem doesn’t go away entirely even when real money is involved. With thousands of professional money managers trying their hands, you’d expect many to succeed brilliantly just by fluke. (Chance predicts that about 300 out of 10,000 managers would beat the market over five consecutive years, according to a calculation by Harvey and Yan Liu.)

So how do you sort out the random from the real? If you are considering a strategy based on historical data, ask yourself three questions:

1) Is there any reason besides the record to think this should work?

Robert Novy-Marx, a finance professor at the University of Rochester, has found that some patterns that seem to predict stock prices work better when Mars and Saturn are in conjunction, and that market manias and crashes may correlate with sunspots. His point being not that these are smart trading strategies, but that you should be very, very careful with what you try to do with statistical patterns.

There’s no good reason to think Mars affects stock prices, so you can safely ignore astrology when putting together your 401(k). Likewise, if someone tells you that, say, a stock that rises in value in the first week of January will also rise in value in the third week of October, you might want to get them to explain their theory of why that would be.

2) What’s stopping other investors from doing this?

If there’s a pattern in stock prices that helps predict returns, other investors should be able to spot it. (Especially once the idea has been publicized.) And once they do, the advantage is very likely to go away. Investors will buy the stocks that ought to do well, driving up their price and reducing future returns. Or investors will sell the stocks that are supposed to do poorly, turning them into bargains.

That doesn’t mean all patterns are meaningless. For example, Yale economist Robert Shiller has found that the stock market tends to do poorly after prices become very high relative to past earnings. It may be that prices get too high in part because fund managers risk losing their jobs if they refuse to ride a bull market. Then again, the same forces that affect fund managers will probably affect you too. Will you being willing to stay out of the market and accept low returns while your friends and neighbors are boasting of double-digit gains?

And even Shiller’s pattern doesn’t work all the time—stock prices can stay high for years before they come down. Betting that you can see something that’s invisible to everyone else in the market is a risky proposition.

3) Does it work well enough to justify the expense?

Lots of strategies that look good on paper fade once you figure in real-world trading costs and management fees. A mutual fund based on the AlphaSector strategy, by the way, charges about 1.6% per year for its A-class shares. That’s eight times what you’d pay for a plain-vanilla index fund, which is all but certain to deliver the market’s return, minus that sliver of costs. And there’s nothing hypothetical about that.

MONEY best places to retire

Retire to One of These 5 Great Small Cities

Love the culture and excitement of urban life, but loathe the congestion and cost? One of these “Second Cities” could be your first-choice retirement spot.

Does the thought of retiring to a sleepy beach town or country hamlet bore you silly? Spending your post-work years in a city has plenty of perks, including easy access to the arts, cutting-edge health care, and a diverse set of neighbors. That said, the cons of urban living (like cost) can be daunting.

There is a happy medium. We set out to find places that won’t ding your nest egg with high taxes and nosebleed prices, yet still have great attractions and plenty of your peers. Read on for five affordable small cities (populations of 150,000 to 500,000) you may one day want to call home.

 

  • Raleigh, North Carolina

    The North Carolina Museum of Art
    Karen Malinofski—NC Museum of Art

    STATS

    Population: 431,700

    Population 62 and over: 11.3%

    Median home price: $210,000

    Cost of living index: 92.3

    TAXES

    Like all the states in this story, North ­Carolina does not tax Social Security benefits. The state has no inheritance or estate tax.

    Income tax: 5.8% flat

    Sales tax: 6.75% (combined state and local)

    Median property tax: $1,800

    WHY IT STANDS OUT

    This state capital’s thriving economy and proximity to top universities have long made it a prime relocation destination. And ­recently more of those new ­faces have had a few wrinkles: from 2000 to 2010 the city’s population of 55- to 64-year-olds shot up by 97%, according to the Brookings Institution. It’s not hard to see the draw: Raleigh provides a big-city feel with a low cost of living; mild, four-season weather; and, thanks to all those medical schools, world-class health care.

    WHERE TO LIVE

    Midtown/North Hills: Retirees looking for an attractive price and a practical location should shop north of downtown, says local real ­estate agent Kim Crump. There you’ll find spacious townhouses and condos starting at around $200,000.

    Downtown: Prefer to be in the center of things? Those willing to pay about twice that price may consider the new condos and lofts downtown.

    WHAT TO DO

    Food: The city has a diverse restaurant scene, with everything from Afghan cuisine to Southern barbecue.

    Music: The 5,000-seat Red Hat Amphitheater hosts the big acts, while the opera and symphony perform at the Duke Energy ­Center for the Performing Arts.

    Art: A range of work is on display in galleries, public spaces, and parks. Or take in the 30 Rodin sculptures at the North Carolina Museum of Art.

    Education: North Carolina State University’s lifelong-learning program offers affordable courses and study trips on topics including American poetry, digital photography skills and Civil War history.

     

  • Pittsburgh, Pennsylvania

    Saturday Farmers Market on The Strip District, Penn Avenue, Pittsburgh, Pennsylvania
    Philip Scalia—Alamy Saturday Farmers Market on The Strip District, Penn Avenue, Pittsburgh, Pennsylvania

    STATS

    Population: 305,700

    Population 62 and over: 17%

    Median home price: $143,000

    Cost of living index: 98.8

    TAXES

    Distributions from most ­retirement plans, including qualifying 401(k)s and IRAs, are largely ­exempt.

    Income tax: 3.07% flat for Pennsylvania, 3% for Pittsburgh

    Sales tax: 7%

    Median property tax: $1,700

    WHY IT STANDS OUT

    Talk about a comeback. At the turn of the 20th century Pittsburgh was an economic and cul­tural hub, home to Andrew Carnegie and ­other captains of industry. Then came deindustrialization and job losses in the 1980s. Now the city is polishing its rusty image by converting old factories and warehouses into office space, galleries, and lofts. The once-dwindling population is also bouncing back; Pittsburgh’s population is growing for the first time since the 1950s. For retirees, Pittsburgh offers a true urban experience, including good public transportation, pro sports, and a host of colleges and universities, all at a bargain price.

    WHERE TO LIVE

    The northeast and south: Homes in popular neighborhoods like Highland Park are now going for around $400,000, says Maryann J. Bacharach at Howard Hanna Real Estate. The South Side, where homes tend to be a bit smaller, is slightly more affordable, with prices coming in around $300,000 or so.

    WHAT TO DO

    Museums: The four Carnegie Museums span art, science, natural history, and a collective 1.3 million square feet. The Andy Warhol Museum is a local favorite (the artist grew up here).

    Performance: Renovated concert halls are home to a thriving symphony, ballet, and opera.

    Sports: Thanks to the Steelers, Penguins, and Pirates, superfans can stay busy all year.

    Outdoors: There are four large city parks under the Pittsburgh Parks Conservancy, including the 644-acre Frick Park, where you can try lawn bowling or tennis.

  • Lexington, Kentucky

    Triangle Park with Victorian Square (shops) in background, downtown Lexington, Kentucky USA
    Blaine Harrington III—Alamy Triangle Park with Victorian Square (shops) in background, downtown Lexington, Kentucky USA

    STATS

    Population: 308,400

    Population 62 and over: 13%

    Median home price: $151,000

    Cost of living index: 92.6

    TAXES

    There’s no local tax on retirement income in Lexington. Homeowners 65 or older get a property tax break. Some family members are exempt from the inheritance tax; there is no estate tax.

    Income tax: State income tax is 6%. There’s technically no local income tax– there is, however, a tax on gross wages of 2.25%.

    Sales tax: 6%

    Median property tax: $1,700

    WHY IT STANDS OUT

    Retirees looking to mix city activities with country charm will find a lot to love here. Lexington’s historic downtown is packed with galleries, restaurants, and boutiques. But drive just a few minutes and you’re in the rolling hills of Bluegrass Country.

    The city is also home to one of the country’s oldest and most robust lifelong-learning programs, as well as the top-scoring Univer­sity of Kentucky Albert B. Chandler Hospital, which has received accolades from the American Heart Association and National Cancer Institute.

    WHERE TO LIVE

    Downtown: Over the past decade, a crop of new condos and loft conversions has transformed the center of Lexington. Indeed, developers got a little overzealous during the boom years, says realtor Casey Weesner, so prices stagnated and condos sat empty in the wake of the housing crash. The market has since picked up, he says, but there are still some downtown bargains to be had. You can find modern two-bedroom condos starting around $200,000.

    WHAT TO DO

    Sports: Welcome to basketball heaven. The Wildcats, the University of Kentucky’s powerhouse team, play at Rupp Arena, which also hosts shows and big music acts.

    Education: Locals age 65 and older can register to sit in on university classes, sans tuition, when­ever there are open seats. University of Kentucky’s lifelong learning initiative is celebrating its 50th anniversary in 2014 and is one of the oldest of its kind in the country. The school’s Osher Lifelong Learning Institute offers classes for the 50-plus set.

    Arts: The campus also boasts the Singletary Center for the Arts. Downtown, the Kentucky Theatre shows independent and classic films.

    Outdoors: Churchill Downs, home of the Kentucky Derby, is 90 minutes away. Bikers can hop on the 12-mile Legacy Trail, which leads to the equine events at Kentucky Horse Park.

     

  • St. Petersburg, Florida

    Beach at Pass a Grille, St Pete Beach, Gulf Coast, Florida, USA.
    Ian Dagnall—Alamy Beach at Pass a Grille, St Pete Beach, Gulf Coast, Florida, USA.

    STATS

    Population: 249,700

    Population 62 and over: 20%

    Median home price: $148,000

    Cost of living index: 91.3

    TAXES

    Retirement income is not taxed. Permanent residents get a property tax exemption of up to $50,000.

    Income tax: None

    Sales tax: 7%

    Median property tax: $1,500

    WHY IT STANDS OUT

    Can’t imagine retirement without a beach? In St. Pete you can dip your toes in the Gulf of Mexico or Tampa Bay—plus play a round of golf, eat virtually any type of cuisine, and see famous art, all in a single day.

    While St. Petersburg is undoubtedly a ­retiree hotspot, the city has also drawn more young families in recent years, says St. Petersburg agent Rachel Sartain. The mix helps keep the city vibrant and stocked with boutiques, galleries, and restaurants.

    WHERE TO LIVE

    Downtown: The market for new apartments and condos was flattened by the bust, but developments are now back on track and in many ­cases selling out quickly. New two-­bedrooms downtown start at around $300,000, says St. ­Petersburg agent ­Rachel Sartain.

    Surrounding neighborhoods: If that’s too expensive, going five or 10 minutes outside of downtown brings ­prices down ­dramatically; condos in many central areas start in the $200,000 range, says Sartain.

    WHAT TO DO

    Beaches: One of the nation’s best (according to Trip­Advisor readers), Saint Pete Beach, is about a 20 minute drive from downtown.

    Art: Try the Dalí Museum for works by the Spanish surrealist, or the Museum of Fine Arts for Monet and O’Keeffe.

    Sports: Tropicana Field is home to the Tampa Bay Rays. There are also plenty of golf courses, including Mangrove Bay, a par-72 championship course.

  • Boise, Idaho

    A mountain biker rides through the foothills above Boise, Idaho.
    Joshua Roper—Alamy A mountain biker rides through the foothills above Boise, Idaho.

    STATS

    Population: 214,200

    Population 62 and over: 15%

    Median home price: $208,000

    Cost of living index: 94.3

    TAXES

    There is no inheritance or estate tax.

    Income tax: Highest is 7.4%

    Sales tax: 6%

    Median property tax: $1,400

    WHY IT STANDS OUT

    Moving to a mountain town means easy access to skiing, hiking, golf, fly-fishing, and more. Unfortunately, it also usually means jaw-dropping home prices, a dinky airport, limited health care, and tourists galore. Not in Boise. Yes, locals here can ski at Bogus Basin 16 miles from downtown, stroll or bike 85 miles of trails, and paddle or fish on the Boise River, which runs through town. But they’ll also find low taxes and affordable homes. Plus, Boise has become a nucleus of culture and health care. Saint Alphonsus Regional Medical Center has been ranked in the top 5% of hospitals nationwide for clinical performance by HealthGrade.

    WHERE TO LIVE

    North and east of downtown: Prices in the city center are steep, so buyers looking for value typically concentrate on the surrounding neighborhoods. You’ll find two-bedroom condos or small single-family houses priced at about $300,000 in the North End, says Michael Edgar of Team One Elite Realty.

    WHAT TO DO

    Outdoors: Walk along the Boise River Greenbelt or explore the trails winding out of Hull’s Gulch or Camel’s Back Park. The city has two open-air Saturday markets, which are a great place to find produce and bump into friends.

    Art: The Boise Art ­Museum has more than 3,000 permanent works and presents diverse exhibitions ranging from site-specific installations to collections of ancient artifacts.

    Performance: Grab tickets for the opera, philharmonic, or ballet. Boise State’s Morrison Center hosts national tours of Broadway shows, stand-up comedy, and live music, while the Shakespeare Festival fills a 770-seat outdoor amphitheater. And there’s more to come: Construction is under way for a new $70 million, 65,000-square-foot cultural center, slated to open in 2015.

    This story originally ran in the November 2013 issue of Money magazine

     

MONEY

How to Max Out Social Security Spousal Benefits

140605_AskExpert_illo
Robert A. Di Ieso, Jr.

Q: My spouse and I are both 61½, retired in mid-2013, and have earned almost equal income for over 40 years. We can afford to wait to claim — but for how long, I don’t know. We would, of course, like to travel and have enough money to enjoy life while we are still “young,” since you never know what the future brings. That’s the gamble, isn’t it? I did call the Social Security Administration several months ago and a very nice woman gave me this advice: We should both file and suspend at 66, collect each other’s spousal benefits, and then collect our full amount at 70. Then when one of us dies, the other one will still have a maximum payment. Do you agree with that? Patti

A: I don’t agree with that advice, Patti. Let me explain why.

Social Security benefits are 76% higher if delayed to age 70 than if begun at age 62, but delaying benefits can seem like a gamble. As you noted, one never knows what surprises life will bring, or when, so many opt to take the money while they can best enjoy it.

But there’s a reason Social Security is called Old-Age, Survivors, and Disablity Insurance. And among all the changes in the years since Social Security was created in 1935, none has been more important for retirements than the tremendous longevity gains that people have experienced. Old age lasts much longer than it used to, and so should your money.

Many people look at the decision about when to claim benefits as a break-even analysis. How long must I survive to make waiting for higher benefits a winning proposition? We are wired to look at money this way. But if you can, think instead about Social Security as insurance for a very long life. Deferring benefits until they are at their greatest possible level makes a lot of sense when viewed this way.

As for Patti, the woman she spoke with at Social Security may have been very nice, but she did not provide very nice advice. It is possible for one spouse to collect spousal benefits while their own retirement benefit is deferred and rises in value. But two spouses cannot both do this.

The classic approach is for both Patti and her husband to wait to claim until they have both reached 66, which is their full retirement age under Social Security rules. At this time, the one with the larger retirement benefit would file and suspend his or her own retirement benefit, enabling the other spouse to file a claim for spousal benefits and receive half of the first spouse’s benefit. Then, at age 70, both would switch to their own retirement benefit.

This approach, as Patti noted, will not bring in any Social Security benefits for several years. If Patti and her husband need some retirement money sooner, an alternative approach is for one of them to file for retirement benefits now. The other spouse would do nothing.

Then, at age 66, the spouse who had filed at 62 would suspend benefits, allowing them to grow by 8% a year until age 70. The spouse who had done nothing could then claim a spousal benefit at age 66 and, at age 70, switch over to his or her own retirement benefit.

There are numerous other versions of this “start-stop-start” strategy that can optimize claiming choices for spouses between the ages of 62 and 70. This Maximize My Social Security software can run all the various scenarios for your situation and recommend the best option. (The company that makes it is run by Larry Kotlikoff, co-author of my book, but I don’t stand to benefit by recommending it.) The service costs $40 a year; given the stakes, I believe the price is well worth it.

Philip Moeller is an expert on retirement, aging, and health. His book, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” will be published in February by Simon & Schuster. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

Do you have a personal finance question for our experts? Write to AskTheExpert@moneymail.com

Read next: How Your Earnings Record Affects Your Social Security

Listen to the most important stories of the day.

TIME advice

10 Life Lessons to Excel in Your 30s

Arrow on pavement
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Be good to the people you care about

A couple weeks ago I turned 30. Leading up to my birthday I wrote a post on what I learned in my 20s.

But I did something else. I sent an email out to my subscribers (subscribe here) and asked readers age 37 and older what advice they would give their 30-year-old selves. The idea was that I would crowdsource the life experience from my older readership and create another article based on their collective wisdom.

The result was spectacular. I received over 600 responses, many of which were over a page in length. It took me a solid three days to read through them all and I was floored by the quality of insight people sent.

So first of all, a hearty thank you to all who contributed and helped create this article.

While going through the emails what surprised me the most was just how consistent some of the advice was. The same 5-6 pieces of advice came up over and over and over again in different forms across literally 100s of emails. It seems that there really are a few core pieces of advice that are particularly relevant to this decade of your life.

Below are 10 of the most common themes appearing throughout all of the 600 emails. The majority of the article is comprised of dozens of quotes taken from readers. Some are left anonymous. Others have their age listed.

1. START SAVING FOR RETIREMENT NOW, NOT LATER

“I spent my 20s recklessly, but your 30s should be when you make a big financial push. Retirement planning is not something to put off. Understanding boring things like insurance, 401ks & mortgages is important since its all on your shoulders now. Educate yourself.” (Kash, 41)

The most common piece of advice — so common that almost every single email said at least something about it — was to start getting your financial house in order and to start saving for retirement… today.

There were a few categories this advice fell into:

  • Make it your top priority to pay down all of your debt as soon as possible.
  • Keep an “emergency fund” — there were tons of horror stories about people getting financially ruined by health issues, lawsuits, divorces, bad business deals, etc.
  • Stash away a portion of every paycheck, preferably into a 401k, an IRA or at the least, a savings account.
  • Don’t spend frivolously. Don’t buy a home unless you can afford to get a good mortgage with good rates.
  • Don’t invest in anything you don’t understand. Don’t trust stockbrokers.

One reader said, “If you are in debt more than 10% of your gross annual salary this is a huge red flag. Quit spending, pay off your debt and start saving.” Another wrote, “I would have saved more money in an emergency fund because unexpected expenses really killed my budget. I would have been more diligent about a retirement fund, because now mine looks pretty small.”

And then there were the readers who were just completely screwed by their inability to save in their 30s. One reader named Jodi wishes she had started saving 10% of every paycheck when she was 30. Her career took a turn for the worst and now she’s stuck at 57, still living paycheck to paycheck. Another woman, age 62, didn’t save because her husband out-earned her. They later got divorced and she soon ran into health problems, draining all of the money she received in the divorce settlement. She, too, now lives paycheck to paycheck, slowly waiting for the day social security kicks in. Another man related a story of having to be supported by his son because he didn’t save and unexpectedly lost his job in the 2008 crash.

The point was clear: save early and save as much as possible. One woman emailed me saying that she had worked low-wage jobs with two kids in her 30s and still managed to sock away some money in a retirement fund each year. Because she started early and invested wisely, she is now in her 50s and financially stable for the first time in her life. Her point: it’s always possible. You just have to do it.

2. START TAKING CARE OF YOUR HEALTH NOW, NOT LATER

“Your mind’s acceptance of age is 10 to 15 years behind your body’s aging. Your health will go faster than you think but it will be very hard to notice, not the least because you don’t want it to happen.” (Tom, 55)

We all know to take care of our health. We all know to eat better and sleep better and exercise more and blah, blah, blah. But just as with the retirement savings, the response from the older readers was loud and unanimous: get healthy and stay healthy now.

So many people said it that I’m not even going to bother quoting anybody else. Their points were pretty much all the same: the way you treat your body has a cumulative effect; it’s not that your body suddenly breaks down one year, it’s been breaking down all along without you noticing. This is the decade to slow down that breakage.

And this wasn’t just your typical motherly advice to eat your veggies. These were emails from cancer survivors, heart attack survivors, stroke survivors, people with diabetes and blood pressure problems, joint issues and chronic pain. They all said the same thing: “If I could go back, I would start eating better and exercising and I would not stop. I made excuses then. But I had no idea.”

3. DON’T SPEND TIME WITH PEOPLE WHO DON’T TREAT YOU WELL

“Learn how to say “no” to people, activities and obligations that don’t bring value to your life.” (Hayley, 37)

After calls to take care of your health and your finances, the most common piece of advice from people looking back at their 30-year-old selves was an interesting one: they would go back and enforce stronger boundaries in their lives and dedicate their time to better people. “Setting healthy boundaries is one of the most loving things you can do for yourself or another person.” (Kristen, 43)

What does that mean specifically?

“Don’t tolerate people who don’t treat you well. Period. Don’t tolerate them for financial reasons. Don’t tolerate them for emotional reasons. Don’t tolerate them for the children’s sake or for convenience sake.” (Jane, 52)

“Don’t settle for mediocre friends, jobs, love, relationships and life.” (Sean, 43)

“Stay away from miserable people… they will consume you, drain you.” (Gabriella, 43)

“Surround yourself and only date people that make you a better version of yourself, that bring out your best parts, love and accept you.” (Xochie)

People typically struggle with boundaries because they find it difficult to hurt someone else’s feelings, or they get caught up in the desire to change the other person or make them treat them the way they want to be treated. This never works. And in fact, it often makes it worse. As one reader wisely said, “Selfishness and self-interest are two different things. Sometimes you have to be cruel to be kind.”

When we’re in our 20s, the world is so open to opportunity and we’re so short on experience that we cling to the people we meet, even if they’ve done nothing to earn our clingage. But by our 30s we’ve learned that good relationships are hard to come by, that there’s no shortage of people to meet and friends to be made, and that there’s no reason to waste our time with people who don’t help us on our life’s path.

4. BE GOOD TO THE PEOPLE YOU CARE ABOUT

“Show up with and for your friends. You matter, and your presence matters.” (Jessica, 40)

Conversely, while enforcing stricter boundaries on who we let into our lives, many readers advised to make the time for those friends and family that we do decide to keep close.

“I think sometimes I may have taken some relationships for granted, and when that person is gone, they’re gone. Unfortunately, the older you get, well, things start to happen, and it will affect those closest to you.” (Ed, 45)

“Appreciate those close to you. You can get money back and jobs back, but you can never get time back.” (Anne, 41)

“Tragedy happens in everyone’s life, everyone’s circle of family and friends. Be the person that others can count on when it does. I think that between 30 and 40 is the decade when a lot of shit finally starts to happen that you might have thought never would happen to you or those you love. Parents die, spouses die, babies are still-born, friends get divorced, spouses cheat… the list goes on and on. Helping someone through these times by simply being there, listening and not judging is an honor and will deepen your relationships in ways you probably can’t yet imagine.” (Rebecca, 40)

5. YOU CAN’T HAVE EVERYTHING; FOCUS ON DOING A FEW THINGS REALLY WELL

“Everything in life is a trade-off. You give up one thing to get another and you can’t have it all. Accept that.” (Eldri, 60)

In our 20s we have a lot of dreams. We believe that we have all of the time in the world. I myself remember having illusions that my website would be my first career of many. Little did I know that it took the better part of a decade to even get competent at this. And now that I’m competent and have a major advantage and love what I do, why would I ever trade that in for another career?

“In a word: focus. You can simply get more done in life if you focus on one thing and do it really well. Focus more.” (Ericson, 49)

Another reader: “I would tell myself to focus on one or two goals/aspirations/dreams and really work towards them. Don’t get distracted.” And another: “You have to accept that you cannot do everything. It takes a lot of sacrifice to achieve anything special in life.”

A few readers noted that most people arbitrarily choose their careers in their late teens or early 20s, and as with many of our choices at those ages, they are often wrong choices. It takes years to figure out what we’re good at and what we enjoy doing. But it’s better to focus on our primary strengths and maximize them over the course of lifetime than to half-ass something else.

“I’d tell my 30 year old self to set aside what other people think and identify my natural strengths and what I’m passionate about, and then build a life around those.” (Sara, 58)

For some people, this will mean taking big risks, even in their 30s and beyond. It may mean ditching a career they spent a decade building and giving up money they worked hard for and became accustomed to. Which brings us to…

6. DON’T BE AFRAID OF TAKING RISKS, YOU CAN STILL CHANGE

“While by age 30 most feel they should have their career dialed in, it is never too late to reset. The individuals that I have seen with the biggest regrets during this decade are those that stay in something that they know is not right. It is such an easy decade to have the days turn to weeks to years, only to wake up at 40 with a mid-life crisis for not taking action on a problem they were aware of 10 years prior but failed to act.” (Richard, 41)

“Biggest regrets I have are almost exclusively things I did *not* do.” (Sam, 47)

Many readers commented on how society tells us that by 30 we should have things “figured out” — our career situation, our dating/marriage situation, our financial situation and so on. But this isn’t true. And, in fact, dozens and dozens of readers implored to not let these social expectations of “being an adult” deter you from taking some major risks and starting over. As someone on my Facebook page responded: “All adults are winging it.”

“I am about to turn 41 and would tell my 30 year old self that you do not have to conform your life to an ideal that you do not believe in. Live your life, don’t let it live you. Don’t be afraid of tearing it all down if you have to, you have the power to build it all back up again.” (Lisa, 41)

Multiple readers related making major career changes in their 30s and being better off for doing so. One left a lucrative job as a military engineer to become a teacher. Twenty years later, he called it one of the best decisions of his life. When I asked my mom this question, her answer was, “I wish I had been willing to think outside the box a bit more. Your dad and I kind of figured we had to do thing A, thing B, thing C, but looking back I realize we didn’t have to at all; we were very narrow in our thinking and our lifestyles and I kind of regret that.”

“Less fear. Less fear. Less fear. I am about to turn 50 next year, and I am just getting that lesson. Fear was such a detrimental driving force in my life at 30. It impacted my marriage, my career, my self-image in a fiercely negative manner. I was guilty of: Assuming conversations that others might be having about me. Thinking that I mightfail. Wondering what the outcome might be. If I could do it again, I would have risked more.” (Aida, 49)

7. YOU MUST CONTINUE TO GROW AND DEVELOP YOURSELF

“You have two assets that you can never get back once you’ve lost them: your body and your mind. Most people stop growing and working on themselves in their 20s. Most people in their 30s are too busy to worry about self-improvement. But if you’re one of the few who continues to educate themselves, evolve their thinking and take care of their mental and physical health, you will be light-years ahead of the pack by 40.” (Stan, 48)

It follows that if one can still change in their 30s — and should continue to change in their 30s — then one must continue to work to improve and grow. Many readers related the choice of going back to school and getting their degrees in their 30s as one of the most useful things they had ever done. Others talked of taking extra seminars and courses to get a leg up. Others started their first businesses or moved to new countries. Others checked themselves into therapy or began a meditation practice.

As Warren Buffett once said, the greatest investment a young person can make is in their own education, in their own mind. Because money comes and goes. Relationships come and go. But what you learn once stays with you forever.

“The number one goal should be to try to become a better person, partner, parent, friend, colleague etc. — in other words to grow as an individual.” (Aimilia, 39)

8. NOBODY (STILL) KNOWS WHAT THEY’RE DOING, GET USED TO IT

“Unless you are already dead — mentally, emotionally, and socially — you cannot anticipate your life 5 years into the future. It will not develop as you expect. So just stop it. Stop assuming you can plan far ahead, stop obsessing about what is happening right now because it will change anyway, and get over the control issue about your life’s direction. Fortunately, because this is true, you can take even more chances and not lose anything; you cannot lose what you never had. Besides, most feelings of loss are in your mind anyway – few matter in the long term.”(Thomas, 56)

In my article about what I learned in my 20s, one of my lessons was “Nobody Knows What They’re Doing,” and that this was good news. Well, according to the 40+ crowd, this continues to be true in one’s 30s and, well, forever it seems; and it continues to be good news forever as well.

“Most of what you think is important now will seem unimportant in 10 or 20 years and that’s OK. That’s called growth. Just try to remember to not take yourself so seriously all the time and be open to it.” (Simon, 57)

“Despite feeling somewhat invincible for the last decade, you really don’t know what’s going to happen and neither does anyone else, no matter how confidently they talk. While this is disturbing to those who cling to permanence or security, it’s truly liberating once you grasp the truth that things are always changing. To finish, there might be times that are really sad. Don’t dull the pain or avoid it. Sorrow is part of everyone’s lifetime and the consequence of an open and passionate heart. Honor that. Above all, be kind to yourself and others, it’s such a brilliant and beautiful ride and keeps on getting better.” (Prue, 38)

“I’m 44. I would remind my 30 year old self that at 40, my 30s would be equally filled with dumb stuff, different stuff, but still dumb stuff… So, 30 year old self, don’t go getting on your high horse. You STILL don’t know it all. And that’s a good thing.” (Shirley, 44)

9. INVEST IN YOUR FAMILY; IT’S WORTH IT

“Spend more time with your folks. It’s a different relationship when you’re an adult and it’s up to you how you redefine your interactions. They are always going to see you as their kid until the moment you can make them see you as your own man. Everyone gets old. Everyone dies. Take advantage of the time you have left to set things right and enjoy your family.” (Kash, 41)

I was overwhelmed with amount of responses about family and the power of those responses. Family is the big new relevant topic for this decade for me, because you get it on both ends. Your parents are old and you need to start considering how your relationship with them is going to function as a self-sufficient adult. And then you also need to contemplate creating a family of your own.

Pretty much everybody agreed to get over whatever problems you have with your parents and find a way to make it work with them. One reader wrote, “You’re too old to blame your parents for any of your own short-comings now. At 20 you could get away with it, you’d just left the house. At 30, you’re a grown-up. Seriously. Move on.”

But then there’s the question that plagues every single 30-year-old: to baby or not to baby?

“You don’t have the time. You don’t have the money. You need to perfect your career first. They’ll end your life as you know it. Oh shut up… Kids are great. They make you better in every way. They push you to your limits. They make you happy. You should not defer having kids. If you are 30, now is the time to get real about this. You will never regret it.” (Kevin, 38)

“It’s never the ‘right time’ for children because you have no idea what you’re getting into until you have one. If you have a good marriage and environment to raise them, err on having them earlier rather than later, you’ll get to enjoy more of them.” (Cindy, 45)

“All my preconceived notions about what a married life is like were wrong. Unless you’ve already been married, everyone’s are. Especially once you have kids. Try to stay open to the experience and fluid as a person; your marriage is worth it, and your happiness seems as much tied to your ability to change and adapt as anything else. I wasn’t planning on having kids. From a purely selfish perspective, this was the dumbest thing of all. Children are the most fulfilling, challenging, and exhausting endeavor anyone can ever undertake. Ever.” (Rich, 44)

The consensus about marriage seemed to be that it was worth it, assuming you had a healthy relationship with the right person. If not, you should run the other way (See #3).

But interestingly, I got a number of emails like the following:

“What I know now vs 10-13 years ago is simply this… bars, woman, beaches, drink after drink, clubs, bottle service, trips to different cities because I had no responsibility other than work, etc… I would trade every memory of that life for a good woman that was actually in love with me… and maybe a family. I would add, don’t forget to actually grow up and start a family and take on responsibilities other than success at work. I am still having a little bit of fun… but sometimes when I go out, I feel like the guy that kept coming back to high school after he graduated (think Matthew McConaughey’s character in Dazed and Confused). I see people in love and on dates everywhere. “Everyone” my age is in their first or second marriage by now! Being perpetually single sounds amazing to all of my married friends but it is not the way one should choose to live their life.” (Anonymous, 43)

“I would have told myself to stop constantly searching for the next best thing and I would have appreciated the relationships that I had with some of the good, genuine guys that truly cared for me. Now I’m always alone and it feels too late.” (Fara, 38)

On the flip side, there were a small handful of emails that took the other side of the coin:

“Don’t feel pressured to get married or have kids if you don’t want to. What makes one person happy doesn’t make everyone happy. I’ve chosen to stay single and childless and I still live a happy and fulfilled life. Do what feels right for you.” (Anonymous, 40)

Conclusion: It seems that while family is not absolutely necessary to have a happy and fulfilling life, the majority of people have found that family is always worth the investment, assuming the relationships are healthy and not toxic and/or abusive.

10. BE KIND TO YOURSELF, RESPECT YOURSELF

“Be a little selfish and do something for yourself every day, something different once a month and something spectacular every year.” (Nancy, 60)

This one was rarely the central focus of any email, but it was present in some capacity in almost all of them: treat yourself better. Almost everybody said this in one form or another. “There is no one who cares about or thinks about your life a fraction of what you do,” one reader began, and, “life is hard, so learn to love yourself now, it’s harder to learn later,” another reader finished.

Or as Renee, 40, succinctly put it: “Be kind to yourself.”

Many readers included the old cliche: “Don’t sweat the small stuff; and it’s almost all small stuff.” Eldri, 60, wisely said, “When confronted with a perceived problem, ask yourself, ‘Is this going to matter in five years, ten years?’ If not, dwell on it for a few minutes, then let it go.” It seems many readers have focused on the subtle life lesson of simply accepting life as is, warts and all.

Which brings me to the last quote from Martin, age 58:

“When I turned forty my father told me that I’d enjoy my forties because in your twenties you think you know what’s going on, in your thirties you realize you probably don’t, and in your forties you can relax and just accept things. I’m 58 and he was right.”

Thank you to everyone who contributed.

Mark Manson is an author, blogger and entrepreneur. This post originally appeared on MarkManson.net.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

MONEY Ask the Expert

How to Cash in on a Piece of History

Investing illustration
Robert A. Di Ieso, Jr.

Q: My mother has a postal savings bond dated 1939. The bond was only $1 dollar. It has my father’s name on it, but he has been deceased for over 40 years. What can my mother do to cash it? How much is it worth? — Kathy

A: Your mother owns an interesting piece of history.

Congress established the Postal Savings System in 1911 to encourage immigrants, who were accustomed to saving via post offices in their homelands, to stash their cash somewhere other than in their mattresses.

Based on your description of the document, it sounds like you have a certificate of deposit. Although the Postal Savings program was in place until 1966, the government stopped issuing Postal Savings Bonds in 1935.

If you want to look into redeeming it, your best bet at this point is to make a copy of the document — hold onto the original — and send it to the Bureau of the Fiscal Service for closer examination.

Assuming it can be redeemed, your mother can do so by submitting a copy of your father’s death certificate or other supporting estate documents.

Keep in mind that with many of these bonds “the historical value is often greater than what they would get if they sent this to us,” says Mckayla Braden, a senior advisor Bureau of the Fiscal Service. “A lot of these instruments stopped paying interest by the 1940s.”

To find out if the document itself is worth something, send a copy of it to someone who specializes in historic certificates or to see how similar documents are valued at collector sites, such as Scripophily.com.

In the end, you may be better off simply holding onto the certificate, as its biggest value may be sentimental. “Sometimes it’s fun to just frame it and put in on your wall,” Braden says.

In the meantime, if you come across other savings bonds, Treasury Direct is a good resource for determining what the bond may be worth and redeeming it. You can use the site’s calculator to look up the value of Series EE, E, and I bonds, as well as Savings Notes.

While you’re at it, check out the Treasury Hunt feature to see if you, or your parents, have any unclaimed savings bonds ready to be redeemed.

MONEY 401(k)s

Here’s a Good Reason Not to Fund Your 401(k)

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Getty Images/Tetra images

Don't get too caught up in the amount of money you're saving for retirement. Focus instead on the income you'll have.

We save for retirement so we can create income for ourselves when we stop receiving a paycheck. And as a financial planner, I am supposed to determine how much money clients need to sock away in order for them to generate enough income to sustain their lifestyle in retirement.

But if the income itself is the most important thing — not the amount of money you amass to create that income — why don’t we ever focus on building lifelong income streams outside of our investment portfolios?

A recent meeting with a client — I’ll call her Mary — sparked an interesting conversation on the subject.

The subject of the meeting was goal planning. We began by outlining SMART goals for the next year, five years, and beyond. Mary had a very specific goal for the next five years: She wanted to leave her current job and become a full-time real estate investor. Although quite interesting, this wasn’t necessarily a unique goal. Many people aspire to do this, yet they get caught up in concerns about retirement — and rightly so.

In order to truly go after this goal, Mary would have to cut back on her retirement savings. “Oh no,” says society. “How can she possibly reduce her 401(k) contributions? She’s in her early 30s and does not have anywhere near enough stowed away. Saving early and often is necessary to ensure that she can retire someday. Plus, tax deferral is too good to pass up!”

I disagree in this specific scenario. Mary happens to know a good deal about real estate. She may not be an expert investor yet, but she is working on it. It’s her dream to create a lifestyle funded by real estate activities, specifically rental income. Additionally, investment real estate can provide some great tax advantages.

However, in order for her to achieve this goal, she has to save for the next down payment on a second investment property (she currently has one such property). From the outside, this goal seems to stand in the way of saving for retirement. To achieve her five-year real estate investment goal at this stage in her life, she can’t fully fund her 401(k). She has to direct most of her savings toward future property purchases.

Let’s shift our point of view for a minute and look at this situation through a different lens. By buying rental properties, she is establishing a sustainable income stream — an alternate form of cash flow from which she can benefit now and in the future. As this rental income grows, her 401(k) and IRA balances become less relevant. The rent checks she receives monthly actually alleviate the burden of amassing a large amount of money for retirement. And she avoids the stress of watching stock market investments ride the economic roller coaster.

This approach is definitely not for most people, but it does raise an interesting question. What other income streams might we be able to establish that could supplement the income from our retirement portfolios? What can we create for ourselves that could take the place of pensions, Social Security, and even our 401(k) plans?

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Eric Roberge, CFP, is the founder of Beyond Your Hammock, where he works virtually with professionals in their 20s and 30s, helping them use money as a tool to live a life they love. Through personalized coaching, Eric helps clients organize their finances, set goals, and invest for the future.

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